Capital Markets Lawyers
We advise on offerings, disclosure and capital markets compliance.
Overview
The Saudi capital market is a disclosure environment: anything affecting an investor's decision must be announced on time and in the prescribed form. The Capital Market Authority looks at timing and form rather than intent, and violations are often committed by companies performing perfectly well that were simply late announcing material information.
We work with listed companies, IPO candidates and financial institutions on offering and listing requirements, continuing disclosure obligations, listed company governance, related party transactions and ownership changes, and defending CMA investigations and violations.
What we see most is disclosure treated as an administrative afterthought: a decision is taken at board level and days later someone asks how to announce it. The correct order is the reverse — the disclosure effect and timing are settled before the decision, because the delay itself is the violation, not the substance.
The legal framework
The capital market is governed by the Capital Market Law and detailed CMA regulations:
- The Capital Market Law and its implementing regulations
- The Rules on the Offer of Securities and Continuing Obligations
- The corporate governance regulations for listed companies
- The Merger and Acquisition Regulations for listed companies
- Provisions on insider trading and market manipulation
- Requirements to disclose interests and substantial shareholdings
Situations we handle
A company preparing to list
Regulatory readiness, governance and financial statements precede the offering by months. Starting late defers the listing by a full cycle.
Announcing a material development
Timing and wording are governed by a defined framework. Delay or partial announcement is a violation in itself.
A related party transaction
Subject to specific disclosure and approval requirements, and ignoring them is among the most common violations by listed companies.
A change in substantial shareholdings
Disclosure on crossing ownership thresholds is an obligation on the shareholder, not only on the company.
A CMA investigation or violation
An organised, documented response within the deadlines shapes the outcome; improvising widens the scope of review.
Costly mistakes we see
- 1
Delaying announcement of a material development
The delay itself is the violation, regardless of the substance or of good faith in verifying first.
- 2
Employees trading before an announcement
Trading on inside information is among the most serious violations, and its consequences extend beyond fines to personal liability.
- 3
Cosmetic pre-IPO governance
A governance file assembled for the offering but never applied is exposed at the first continuing obligation after listing.
- 4
Overlooking related party transactions
Undisclosed dealings are among the most frequently detected and penalised issues in listed companies.
How the procedure runs, step by step
The Capital Market Authority rules govern offerings, disclosure and insider dealing, and breaches are administrative and quickly penalised rather than requiring long litigation.
- 1
Identify the offering type and route
A public offering, a private placement, and a Nomu listing each carry different disclosure, capital and track record requirements. The route chosen drives cost and timing more than any other factor.
- 2
Prepare the structure and governance
Before an offering, ownership is cleaned up, audit and remuneration committees are formed, and conflict-of-interest policies documented. A company starting the process with incomplete governance loses at least a year.
- 3
Prepare the prospectus
The prospectus is a document of legal liability: every statement in it can be asserted against the company and its board. Concealing or softening a material risk factor is what creates liability later, not the existence of the risk.
- 4
File and respond to CMA comments
The application is filed and CMA comments are answered with documented responses. The number of comment rounds is what sets the real timetable for the offering.
- 5
Continuing obligations after listing
Immediate disclosure of material developments, periodic disclosures, and insider dealing restrictions and closed periods. Immediate-disclosure breaches attract more CMA penalties against listed companies than anything else.
Documents we will ask you for
- Audited financial statements for three years
- The constitution and articles of association
- The ownership structure and shareholders’ register
- Governance policies and committee charters
- Material contracts and existing obligations
- A valuation or financial adviser’s report
Fees and timelines
Ongoing advice for listed companies is offered on an annual retainer or per matter. Offering and listing files are priced by stage: readiness assessment, document preparation, then managing the file with the authorities. Violation files are priced separately.
On timing: an IPO readiness assessment takes four to eight weeks. The offering process itself runs for months depending on the company's size and the state of its accounts and governance. Responding to a violation is subject to short deadlines that we address immediately.
Common questions
When must a material development be announced?
As soon as the material information exists, in the manner the rules prescribe. The test is the effect on an investor's decision, not how significant management considers the event, and delay for internal verification is not generally an excuse.
What is insider trading?
Trading on, or disclosing, material non-public information in order to benefit from it. Liability attaches to the individual as well as the company, and it is among the most serious violations in the capital market regime.
What are the listing requirements?
Requirements relating to legal form, capital, audited financial statements, governance and track record. They differ between the Main Market and Nomu, and the position should be assessed months rather than weeks in advance.
What are related party transactions?
Dealings between the company and persons connected to its management or ownership. They are subject to specific disclosure and approval requirements, and ignoring them is among the most frequently detected violations in listed companies.
When must a change in ownership be disclosed?
On reaching or crossing the ownership thresholds set in the rules. The obligation rests on the shareholder, and many violations here come from shareholders who assume the company is responsible for disclosing.
How do we prepare for a CMA investigation?
By assembling the documents, establishing the chronology precisely, and responding within the deadlines. A parallel internal review is essential to understand the real position before responding, because contradictory answers are sometimes worse than the underlying facts.
Do Nomu rules differ?
Yes, listing and disclosure requirements are relatively lighter than the Main Market, but they are far from absent. Continuing obligations exist in both and require an internal compliance structure.
Will you review our announcements before publication?
Yes. Reviewing wording and timing in advance costs far less than remedying a disclosure violation afterwards, particularly for announcements on results, transactions and management changes.
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